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eBay buys Magento

According to official press-release published today at eBay web site, auction giant acquired rest of share in Magento Inc, the creator of Magento e-commerce – one of the most popular open source e-commerce platforms. Last year eBay already bought 49% stake in Magento and today announced the full ownership purchase.

According press-release, Magento will be used to build new product from eBay, X-commerce:

X.Commerce, eBay’s newly created integrated open commerce platform group, is focused on leveraging the company’s assets and partner technologies to build a strong, robust developer community as a resource for merchants and retailers of all sizes

It’s interesting to track how the situation will develop and what happen with Magento open-source solution. It would be pity if eBay decides to shut it down.

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Groupon goes to IPO

As Techcrunch reported US group buying industry leader Groupon filed SEC registration statement (S-1 form). Groupon plans to attract $750M of capital . Unfortunately from the article and SEC filing it is not clear what number of shares and the percentage of ownership will be offered, but rumored valuation (according SmartCompany and Wall Street Journal) is around $20-25 billion.

There are some interesting financial data about the company performance till 1st quarter (ended March 31) of 2011. I put the most important numbers in the table below (all numbers are in thousands):

Continue reading “Groupon goes to IPO”

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Groupon claims to secure the biggest share in group buying web traffic

As ITwire reported, Groupon Australia (trades as StarDeals.com.au) declared last week that just in few months after launch Stardeals.com.au web site managed to acquire more web traffic than any competing web sites (biggest competitors are reportedly Scoopon, Spreets, Cudo, JumpOnIt/LivingSocial). Representative of US based pioneer of group purchases industry refers to Hitwise traffic statistic.

However competitors, namely Cudo, doubt that this statistic reflects the reality and Hitwise data has several major flaws: limited coverage (no Telstra and Optus for example), traffic is measured at providers (not users) so it is easier to use bots and tricky ads to inflate the statistic.

In my personal opinion these doubts look reasonable.

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Does the business benefit from group buying promotion? New research published

Professor Utpal M. Dholakia, Rice University, the guy who made probably the first academic study about group buying promotion published a new paper – “A STARTUP’S EXPERIENCE WITH RUNNING A GROUPON PROMOTION”. He did this job with Gur Tsabar from Gourmet Prep Meals (GMT), a start-up that participated in the study.

GMT is a start-up business from Texas that sells ready-to-cook food sets online. After couple months of operation GMT launched Groupon promotion and share with researchers all the data from their accounting system to analyze the effect of group buying promotion to GMT business.

Key fundings:

  1. Groupon promotion definitely boosted the revenue;
  2. The overall profit was not affected significantly before the end of promotion, taking in account coupons that were not used the effects is positive;
  3. The margin dropped during the promotion;
  4. Peak loads with most active redemption of coupons were the start and the end of promotion time, heavier at the end, just before coupons expired;
  5. Group buying customers are especially useful for start-ups, since help to test the business model and provide valuable real feedback

Full report is available at Dr. Holakia’s page: http://www.ruf.rice.edu/~dholakia/

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Scoopon got massive investments

SmartCompany reported today that Catch of the Day (a venture of Leibovich brothers which Scoopon is a part of) received $80 million investment from James Packer’s Consolidated Press Holdings, Seek co-founder Andrew Bassat and American hedge fund Tiger Global. The Catch of the Day founders will keep controlling stake, but Tiger’s Lee Fixel and Seek’s Jason Lenga will join the board.

Scoopon is the last from three leading group buying web sites in Australia that was acquired or got external funding. Two others are Spreets (now part of Yahoo!7 and JumpOnIt – was purchased by LivingSocial).

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Does your digital marketing campaign work?

There is an old quote (reportedly from John Wanamaker) saying: “I know exactly that half of my advertisement doesn’t work, the problem that I don’t know which half”. That was a real problem which businesses faced in the middle of 20th century. Fortunately now, particularly for digital advertisement, we can answer this vital question and understand which our marketing activity works well, which not so well and which actually is a waste of money.

Strictly Business: ROMI of online advertisement

Continue reading “Does your digital marketing campaign work?”

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Crowdmass was acquired by Groupon

Next interesting deal on Aussie group buying market, after Yahoo!7 bought Spreets last year and JumpOnIt was sold to LivingSocial, last week the world-wide market leader and pioneer, US based Groupon purchased Melbourne group purchase web site CrowdMass.

If you visit Crowdmass web site you will see the message:

Crowdmass has joined the team at Stardeals by Groupon Australia (part of the fastest growing company in history).

Reportedly, as I understood from the record in the blog of the guy who knows them, Crowdmass founders – David Wei, Ying Wang and Tim Wu remain in the Groupon/Stardeals team.

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Has Groupon started to decline?

According to US daily deals aggregation service Yopit Groupon’s revenue decreased 30% in February 2010.

Is such decline a sign of the fade of the daily deals market in general or Groupon’s particular problem? The company has changed it’s business model significantly from single “the best deal in the city”, that worked extremely well and helped Groupon to become multi-million business in very short term. Now there are such stuff as geo-targeted deals, merchant’s stores.
Maybe this is not what Groupon costomers are looking for and this new business model conflicts with Groupon’s brand promise?

Interesting that according Yopit, LivingSocial – second business group buying web site revenue has been growing in “59% in March and is now generating as much revenue as Groupon in major markets”.
GroupOn declines while LivingSocial grows at major markets, March 2011

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Groupon/Stardeals started to sell in Australia

Today I have passed by Stardeals.com.au web site (that is the name that Groupon has to use in Australia) and have discovered that they finally started to sell something real!

There are current deals advertised for for Melbourne, Sydney, Perth, Brisbane, Adelaide, Newcaste and Canberra plus a National Deal. If we dig a bit deeper however, appeared that so far site is really working for Sydney only, where more than dozen past deals reported plus a bit for Melbourne (1 deal). For other the deals showed in fact are national as I see.

Regarding Sydney the progress is not bad, from past deal most popular really local deal (10-day Pass to fitness centre) was sold 776 times, first deals started from just 108 purchases.

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Typical group buying web site user: 45-60 yo woman

According statistic from online research company ViziSense cited in recent “The Australian Financial Review” article 60% of group buying web site users are women, most of users are aged 45 to 60.

Scoopon users tend to be younger, 36-44.

ViziSense analyzed audience of Spreets, Cudo, Scoopon, JumpOnIt, Spreets and OurDeal.